Which feature of a customs union differentiates it from a free trade area? A. Harmonization of members' tax ratesB. A common currencyC. A common external trade policy toward nonmembersD. Ability of factors of production to move freely between members

Answer: The correct answer is choice c.

Explanation: The feature that differentiates a customs union from a free trade area is that a customs union requires all members to have a common external trade policy toward non members. Free trade areas are permitted to negotiate different tariffs with different countries, contrary to the operation of a customs unions.